Ethical Management

Establishing a Sustainability Culture of Giving Back

As the department store with the longest history, the widest operating base, the most localized, and the most continuous transformation in Taiwan, FEDS adheres to the business spirit of “honesty, diligence, simplicity, prudence, and innovation”, and regards “feedback” as the basic values of sustainable development. For stakeholders such as shareholders, customers, employees, society, and peers, FEDS makes appropriate action plans to demonstrate the sustainable values of feedback.

Creating a digital mall to enrich customer experience.

Improving corporate profitability and creating shareholder value.

Exert influence and promote communication and exchange among peers.

Caring for society, establishing public welfare platforms, and investing in public welfare activities.

Provide better salary and benefits than peers, establish a sustainable and inclusive workplace.

Implementation of Ethical Management

FEDS upholds the concept of ethical management formulate the “Code of Ethical Management”, the “Code of Ethics”, the “Best Practice Principles of Ethical Corporate Management”, the “Report and Disciplinary for Violation of Ethical Behavior and Integrity Management” and other regulations as the standards of conduct followed by all employees to strengthen corporate governance and ethical management. Meanwhile, the precaution mechanism is implemented in the annual internal control self-evaluation, which requires each unit to assess whether its business conduct meets the standards of integrity and ethical value required by the Company to mitigate the corruption risk. No major corruption risk violating laws and regulations was identified in 2023.

Communication Channels
  • Audit Committee: Accept reports from shareholders, investors and other stakeholders.
  • Audit Supervisor: Accept reports from suppliers, contractors, etc.
  • Human Resources Department: Accept reports from employees.
Promotions
  • Company website
  • e-bulletin
  • Internal meetings
  • Education and training
  • Group publications
Training and Assessment of Employees
  • Supervisors should evaluate personnel’s ethical behavior at any time to serve as the basis for annual performance appraisal.
  • In 2023, 1,111 hours of internal and external training related to ethical management were conducted with 1,026 participants.
  • The audit office organized 37 trainings on internal control with 1,072 participants.
Procedures
  • The accepting unit shall clarify the specific evidence. Any risk of dishonest conduct shall be reported and handled in accordance with the procedures.
  • The case shall be handled confidentially, and verified through an independent method to fully protect the whistleblower.
  • After the case is verified to be true, the relevant units shall be instructed to review the procedures and propose improvement measures to prevent the same conduct from recurring.
Internal Control Self-Valuation

  Integrity and Ethical Value are Listed as Key Items

  • The internal control self-assessment system CSA includes a total of 21 control points in the self-evaluation questionnaire. The members of the Board of Directors, senior executives, supervisors and employees are requested to conduct self-evaluation.
  • For those who self-evaluate integrity and ethical value items in the internal control self-evaluation system, the performance self-evaluation and risk level self-evaluation are conducted based on control objectives and control points. For example, emphasizing the importance of integrity and ethical value, establishing standards of integrity and ethical value and informing all members of the organization to understand and implement them, and managing the contact between the Company and its partners (suppliers, investors, creditors, competitors, accountants…).
  • In 2023, 864 people in the parent Company and subsidiaries of FEDS Retail Group participated in the integrity and ethics self-evaluation questionnaire of the CSA system.

  To Attach Importance to the Integrity and Ethical Value of Partners

  • The audit office analyzed the abnormal data of the system through automatic intelligent ACL digital audit, and verified the abnormal points and make-up record behaviors of HappyGo cards.

Promoting Corporate Governance Actively

Since 2019, FEDS has established a “Corporate Governance Officer” to supervise and execute the corporate governance business. The Corporate Governance Officer has completed 12 hours of training in 2023. The main duties and implementation status in 2023 are as follows:

  • The agenda of the Board of Directors was notified to the directors 7 days in advance, and the minutes was completed within 20 days after the meeting.

  • To handle shareholders’ meetings, and prepare meeting notices, meeting handbooks, minutes, etc.

  • To formulate the annual training plan for directors and assist in arranging 5 courses.

  • To confirm that the meetings of the Board of Directors and the shareholders’ meeting were convened in accordance with the requirements of Corporate Governance Principles.

  • To announced 46 major company messages in both Chinese and English respectively and review the legality and correctness of the content.

  • To arrange 4 communication meetings between independent directors, audit officers and CPAs.

Enhancing Information Transparency

FEDS has both Chinese and English websites, ESG sustainability website, which disclose complete revenue information of the financial reports, corporate governance, corporate sustainable development. FEDS also has a spokesperson and acting spokesperson system, and holds investor conference and releases public information from time to time to maintain constant communication with stakeholders. The Company also has assigned a dedicated person responsible for the disclosure of major information in the “Market Observation Post System”, which effectively increase the transparency of information.

To Revise Relative Specifications of Corporate Governance

In 2023, FEDS revised 4 corporate governance norms, including the “Corporate Governance Principles”, “Rules of Procedures for Shareholders’ Meetings” and “Audit Committee Charter”, and established the “Rules Governing Financial and Business Matters Between this Corporation and its Related Parties”, making the Company’s management and operation and business mechanism more comprehensive. At the same time, it also protects the interests of shareholders and takes into account the interests of other stakeholders. In the future, FEDS will continue to implement and promote corporate governance in accordance with the various guidelines issued by the competent government authorities to ensure the steady development of the governance mechanism.

Main Implementation Results of Corporate Governance

Enhancing the Functions of the Board of Directors

  • The number of independent directors exceeds one-third of the total directors
  • At least 1 female director
  • Half of the independent directors shall serve no more than three terms
  • Implementing the disclosure of Board diversity information
  • Buying liability insurance for directors and important staff
  • The number of training hours for directors complies with legal requirements

Improving Information Transparency

  • Improving the audit quality of financial reports and promoting the Audit Quality Indicators (AQI)(AQI)
  • Releasing the financial information of the previous year within 75 days after the end of the year
  • Releasing the operating performance of the previous month before the 10th day of each month
  • Setting up the “Investor Section” on the Company’s website to disclose corporate governance information
  • Setting up the “ESG Sustainability Section” on the Company’s website to disclose ESG information

Facilitating Communication with Stakeholders

  • Uploading the handbook of shareholders’ meeting and other materials 30 days before the shareholders’ meeting
  • Uploading the Company’s Chinese annual report 18 days before the shareholders’ meeting
  • Uploading the Company’s English annual report 16 days before the shareholders’ meeting
  • Adopting electronic voting system to strengthen shareholder activism
  • Announcing in advance the voting result of the proposals submitted to the shareholders’ meeting
  • Encouraging shareholder participation by holding physical and video shareholders’ meetings

Deepening the Sustainable Governance Culture

  • Establishing the Corporate Sustainability Committee to promote the sustainable development
  • Setting up corporate sustainability image wall and internalizing sustainability thinking
  • Promoting the diversified gender composition of directors

Related Information

Corporate Governance Principles

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Code of Ethics

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Meeting Rules of Board of Directors

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